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What is the effective annual rate

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Question 1 - Suppose an investor in the US buys a Japanese corporate bond from a broker's inventory. Is this bond being purchased on the Primary or Secondary market? What factors most likely maximizes this investor's, the individual buying the bond, return over the course of its holding period? Suppose the investor sells his bonds before maturity and uses some of the proceeds to purchase a zero-coupon T-Bill with a $100 face value and 6-month maturity. What is the effective annual rate (EAR) if it was purchased for $95.52?

Question 2 - Based on the investment information given below, answer the following questions. Returns and standard deviations are both expressed as percent per year. When using the utility formula, however, returns and standard deviations must be expressed in decimals.

Reference no: EM133116009

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